For now, only bitcoin and ether have ETFs in the United States.
There are ETF applications for Litecoin, Solana, and XRP, among other cryptocurrencies.
The company Canary Capital submitted to the SEC, the US regulator, an S-1 amendment for its proposed Litecoin (LTC) cryptocurrency exchange-traded fund (ETF). Although this does not guarantee that this instrument will be approved, it shows that the necessary process for its possible authorization is advancing.
“We had heard rumors that the proposal had received comments from the SEC,” comment American exchange-traded fund analyst Eric Balchunas commented on this. “This seems to confirm it, which bodes well for our prediction that Litecoin is very likely to be the next coin approved for an ETF,” he highlights.
This suggests, according to the specialist, that the other cryptoasset ETF proposals such as XRP and solana (SOL) that are before the SEC may not be the next to be approved.
Balchunas further distinguishes that the new chairman of the SEC has not yet started his term and that is a big variable. The current official in the position, Gary Gensler, will resign on Monday before the inauguration of Trump, who will be president of the United States on January 20.
Gensler has disapproved of spot crypto asset ETF proposals for years, until a judge ruled the rejections unjustified in response to a lawsuit. With this pressure, the body finally authorized bitcoin (BTC) a year ago and ether (ETH) months later. At the moment, there are no other crypto assets in the United States.
Gensler’s departure is part of Trump’s strategy to turn the United States into the capital of the cryptocurrency industry.
In general, amendments to ETF proposals are submitted in response to requests from the SEC for the instruments to be approved. That is why this new initiative from the request for Litecoin generates enthusiasm about this possibility.
“There are no guarantees, but this could be an indication of the SEC’s involvement in the filing,” explains James Seyffart, a fellow Balchunas analyst. However, he emphasizes that there is still no 19b-4 filing for this proposal, a step that would start the final potential approval/rejection clock.
In other words, “it’s an indication of a possible SEC compromise, but until we see a 19b-4 filed and acknowledged, we’re still guessing,” Seyffart summarizes.
The price of LTC has reacted upward to this situation, rising 12% in the last 24 hours to USD 116. Despite this, it is still 70% below its record of USD 412 registered three years ago in the 2021 bull cycle.
LTC price could benefit
Spot ETFs invest directly in the underlying asset. This means that it buys the asset in proportion to the capital acquired by the fund and sells based on the exits. It is for this reason that these instruments pressure the price of the asset upwards or downwards, depending on its flow.
Those who usually access these financial instruments are traditional investors who operate on the stock market. The United States has the largest stock market in the world, so a litecoin ETF could open the door for this cryptocurrency to large investments.
In this sense, the price of LTC could see upward pressure if this ETF is approved. However, it should be taken into account that, even if its launch is authorized, there is no guarantee that it will attract demand, so in that case the asset would not be valued.
Given Trump’s industry-friendly regulation, It is not ruled out that this year all cryptoactive ETFs requested before the SEC will obtain the green light to enter the market.
